Second Reading debate resumed.
My Lords, I am pleased to be speaking in this debate today on the Employment Bill. Overall, I welcome the aims of the Bill. They are to protect those workers who are among the most vulnerable and to reduce complications in the law for both employers and employees. Currently, the statutory workplace procedure can be both bureaucratic and burdensome. If industrial disputes can be solved earlier and less formally that would be a good step forward, so I welcome the proposal to strengthen unfair dismissal law and the new penalties for those employers who flout the national minimum wage. As the Minister said, there may be a few. I also welcome the creation of a further method for dealing with national minimum wage arrears which are owed to workers, the strengthening of the investigative powers of employment agency inspectors and the increased penalties on those agencies that breach minimum standards.
All the above aims are also supported by the TUC and its two largest affiliates—my own union, Unite, and Unison. As always, however, improvements can be made to the Bill to further its aims. Other noble friends, much more knowledgeable than I, will speak on these issues and I look forward to their speeches. I have two small points on which to question the Minister. First, will we have any opportunity to consider the revised wording of the ACAS code of practice prior to its circulation and implementation? Secondly, would it not be more logical and tidier for employment tribunals to enforce underpayment or non-payment of awards, rather than the county courts?
I now turn to two other areas covered by the Bill. The first relates to employment tribunals. I want to alert your Lordships to what is happening to employment tribunals today, I am afraid, in dribs and drabs in different Bills. We dabble in employment tribunals from time to time and we are doing so yet again in this Bill. I raise this issue because I firmly believe that in dabbling in this way we actually move the employment tribunal system away from its original purpose. That purpose, as my noble friend Lord Jones of Birmingham is very aware, was to be the court where working disputes could be resolved, a court where, most importantly, employers and those who work for them could present their cases to a tribunal, whose membership consisted of representatives from both sides of industry, sitting with a chair with legal expertise. That meant that those adjudicating had an in-depth knowledge of the matters under consideration, and those three members were of equal status. The more we tinker with employment tribunals and the access to them, as we are doing, the further away we move from their original purpose.
I shall give an example of what happens when we dabble with tribunals in different pieces of legislation. When we debated the Tribunals, Courts and Enforcement Act 2007, in answer to a point I raised, the then Lord Chancellor, for whom I have tremendous respect, gave a guarantee that the employment tribunals and the immigration tribunals would remain stand-alone pillars. However, it would appear that this may not remain the case.
At present, the Government are seeking views on a recently published document entitled, Transforming Tribunals, which is part of the ongoing implementation of a unified tribunal service. In this document the lines between the pillars separating employment tribunals and immigration tribunals from the rest of the tribunal system are becoming increasingly blurred. I am not the only person to be deeply disturbed by what is happening in this piecemeal way to employment tribunals. Many of those involved in tribunal work are deeply worried about their future direction. I will illustrate this concern by quoting the response of one tribunal to the Government’s proposals in the consultative document. The Government state that their starting point is the history behind the present use of non-legal members and they believe that now is the time for a major reassessment.
My husband has been a member of the Central London Employment Tribunals Members Association for over 12 years. Its response is that the Government’s proposals, if adopted, would open the way for radical changes to the widely accepted basis of tribunals, which would be to the detriment of the parties and the quality of decision-making, and to the detriment of the tribunals’ credibility and effectiveness. The concern of the non-legal members about their status and role in future employment tribunal decision-making processes is understandable when one considers the very recent decision to change the title of employment tribunal chairs to employment tribunal judges, even before the fundamental review has taken place. If we are not careful this could have disastrous results for industrial relations. We will need to keep a close eye on what happens in the future.
Finally, I turn to Clause 13 of the Bill, which covers the exemption of the cadet force adult volunteers—CFAVs—from the national minimum wage. These adults volunteer to assist in the activities of the cadet forces of our country, and they are invaluable to the running of the cadets in the Air Training Corps, the Army Cadet Force, the Sea Cadet Corps and the Combined Cadet Force. We have 130,000 cadets, many of whom will become the future generation in our Armed Forces. They are young people of whom we should be proud, and for whom we should ensure a high standard of support and training. This is where the cadet force adult volunteers come in—more than 26,000 men and women give up so much of their time to help. They give 1.6 million volunteered evenings and 590,000 whole-day’s training at weekends and annual camps each year. Of the 26,000 volunteers, 20,000 receive occasional remuneration.
I declare an interest here. I am very proud to be the honorary president of the Yeadon Squadron 2168 Air Training Corps, and I am also the representative of the Air League Council on the Air Cadet Council. In these capacities I see the work of the adult volunteers at first hand and it is remarkable. Men and women work side-by-side with the young men and women in the corps, schooling them in how to be responsible cadets and, equally importantly, to become valuable citizens.
Noble Lords will be aware that I am a keen supporter of the national minimum wage. I have fought over the years for the most vulnerable in our workforce to receive it. However, I totally agree with the exemption of CFAVs from the national minimum wage, as they do. It was never intended that CFAVs would be paid the national minimum wage. However, there has been confusion about the position, and Clause 13 clarifies the issue. The MoD has consulted widely with senior members of the CFAV, the cadet force association and the public, and the resounding response has been support for the view that CFAVs are not workers, but volunteers, and that they prize that position. The MoD recognises the enormous work they do by giving them a small remuneration, which has been the custom for many years. It recognises that CFAVs have to do much more than many other voluntary youth workers: they are trained to a high level of expertise; they deliver military-themed activities; they undergo special security; they sign the Official Secrets Act; and they adopt the military ethos of the armed services. Paying CFAVs the national minimum wage would designate them as workers and would impose obligations upon them which would remove their flexibility to volunteer as it suits. Like other noble Lords, I have received a letter from General Sir Jack Deverell, the president of the Army Cadet Force Association, seeking my support for Clause 13, and I am pleased to give it. General Deverell describes the CFAVs giving selfless commitment and inspirational leadership, and he is right.
My Lords, I join the noble Baroness, Lady Gibson of Market Rasen, in her tribute to the cadet force adult volunteers—I could not agree with her more. Secondly, I declare my interest as a partner in the national commercial law firm of Beachcroft LLP and my other interests set out in the Register; thirdly, I welcome the noble Lord, Lord Bach, to the Government Front Bench. He is one of the hardest-working Peers in this House. He gave me tremendous support when I had the honour of chairing the Joint Select Committee on the Legal Services Bill. In his safe pair of hands, I look forward to participating with him in the Committee stage of the Employment Bill.
Having said all that, this is by no means the neatest Bill we have ever had in this House. Even at Second Reading, I am finding it difficult to discern the unifying principle or principles that we should ideally be discussing. As my noble friend has already pointed out, if there is a unifying theme it is certainly not to reduce the regulatory burden on UK plc. Given the repeated commitment by Ministers to cutting back on the numerous impositions on business, that is pretty disappointing. It would be churlish not to acknowledge that employment levels in the UK are at unusually high levels, but the economic situation is not as we would wish it with the credit squeeze and signs of turbulence in the stock markets. Job creation in the United States is beginning to slump, and if the world’s biggest economy carries on sneezing, we will all catch a cold. There are therefore no legitimate grounds for complacency, yet here we have a Bill that boasts the title of “Employment Bill” but does nothing to stimulate job creation.
I fear that this may be a missed opportunity. What will the Bill do to help create the much-vaunted “British jobs for British workers” about which the Prime Minister was recently enthusing? Not much, as far as I can see. Later on, we will be debating apprenticeships. I humbly suggest that they are rather more important to our national prosperity and well-being than anything contained in the Bill.
I turn to what is in the Bill. I feel certain that two rather technical areas of the Bill—employment agencies and the enforcement of the minimum wage—will be subject to some detailed scrutiny in due course, both here and in another place. We should not be doing our job if we did not require Ministers to set out their detailed arguments for the new powers that they want to establish, but that is a matter for later stages.
I want to focus on two aspects of the Bill. In my professional life both as a lawyer and as a parliamentarian, I like to think that I have always had a reasonably good working relationship with trade unionists, and even with trade unions themselves. Through my work as president of the All-Party Group on Occupational Safety and Health, I continue to find myself regularly exploring common causes and interests with trade unions. I welcome that. I do not, therefore, approach Clause 17 from a position that is inimical or even remotely hostile to free and independent trade unions—not at all. I must say, however, that I share the unease expressed so eloquently by my noble friend about that provision.
I dare say that Ministers will stick gallantly to the line that they are merely responding to the judgment of the European Court of Human Rights in the ASLEF case. Having read that judgment, I was surprised to find that it focused so little on individual human rights. Perhaps that is something that we will debate in greater detail in future. Furthermore, Ministers will no doubt reiterate their aspiration, as the noble Lord, Lord Jones of Birmingham, did earlier, that the legislation will be used only against extremists and against members of parties that all of us regard as being outside the acceptable mainstream. Frankly, I take little or no consolation from that. The aspirations of Ministers are one thing; the actions of some trade unions in the courts can all too often take us in a different direction altogether.
I by no means oppose the provision on principle, but whenever Ministers trespass into areas of personal conscience, political loyalties and affiliations, they inevitably play with fire. Once again, detailed scrutiny will prove to be very interesting indeed. When one analyses the constitution of ASLEF, one finds in Rule 3.1(vii) a provision that members must,
“assist in the furtherance of the labour movement generally towards a Socialist society”.
We have not heard much about that in recent times, but it reflects the fact that we are entering a dangerous area here in interfering with individual human rights. Of course, I await with great interest the speeches to come from some of our distinguished Queen's Counsel, and I look forward to debating that clause in greater detail.
My principal interest in the Bill, however, lies in the earliest part, namely, Clauses 1 to 7, dealing with dispute resolution. I have long been an advocate of alternative dispute resolution, or ADR, in its various forms. This is another area in which my interests and activities outside this place coincide neatly with my role as a legislator. I should declare an interest as a mediator accredited by CEDR—the Centre for Effective Dispute Resolution.
I broadly welcome the provisions in the Bill dealing with the future of dispute resolution. I hate to say “We told you so”, and I know what the Minister said earlier, but there was a roar from a lioness—my noble friend Lady Miller—predicting that the Employment Act 2002 provisions would fail to provide the panacea for all ills that Ministers had hoped for. It is now clear they have indeed failed to reduce the number of employment disputes that escalate into tribunal cases: tribunal cases have increased by almost a third since the new measures were introduced.
I have read carefully the excellent report of Michael Gibbons on this subject, and my noble friend has shared some of the statistics with the House. It is to the credit of Ministers that they kept their word and subjected the statutory system to hard-edged scrutiny now that it has been up and running for a time, just as they said they would. The system they propose to abolish came about in an unusual manner. The Employment Act 2002 established a framework for promoting the resolution of employment disputes in the workplace, but the detailed procedures emerged from a process of substantial pre-consultation, consultation and due consideration during 2003 and 2004. Then, two years after the new regulations came into force, Michael Gibbons began his review. The forward to his report describes Michael Gibbons’s judgment in the following terms:
“This is perhaps a classic case of good policy, but inappropriately inflexible and prescriptive regulation”.
This is such an important area and the noble Baroness, Lady Gibson of Market Rasen, was right to highlight it.
The Centre for Effective Dispute Resolution estimates that conflict costs UK plc some £33 billion a year—an astronomical figure. The Gibbons report has now given us a far more flexible and less prescriptive way to take things forward than the stultifying hand of statutory regulation. Of course, as the noble Baroness pointed out, the devil will be in the detail. I hope that we will see these codes, particularly those referred to in Clause 3(2)—I press the Minister on that. To be more specific, will the codes explicitly refer to ADR in the workplace and encourage its proliferation? I am concerned to ensure not only that successful mediation in the workplace is encouraged, obviating the need for expensive tribunals, but also that mediation in particular should play a far greater role.
The keynote for mediation and mediators is preparation. Mediation often works best early in the process, but there are countless instances of it unlocking seemingly intractable deadlocks, even after a process has gone a long way down its unhappy track. As one director of CEDR wrote recently:
“Often it is the dynamic of an independent and impartial intervention that can be most powerful in enabling parties and organisations in disputes to see issues clearly”.
Another issue of which I am sure the Minister is only too aware is the inherent difficulty of reconciling a push for ADR with the requirement to uphold the entitlement of employees to enforce their rights under statute and European law. I think of the many products where generous promises of immediate reimbursement are accompanied by the slogan “Your statutory rights are not affected”.
Finally, I am also concerned about the role of ACAS. Is it envisaged that restoring and enhancing its role in the conciliation of workplace disputes will encompass mediation? I am not sure that I know the difference between conciliation and mediation, if there is one. But is it a practical or useful question? We will no doubt discuss that. In any event, an enhanced role for ACAS will have to be backed up by the restoration of resources. I note that the noble Lord, Lord Jones of Birmingham, referred to investment in ACAS and I hope that there will be substantial investment. I look forward to hearing many positive words about mediation in the debates ahead.
My Lords, I welcome the opportunity to contribute to this debate and I am obliged to the Minister for his detailed introduction. I should declare my interest: for many years, I was assistant general secretary of one of the founding unions of the Unite union. Much of the Bill I support; I believe it to be well intentioned. However, I have a number of queries.
As we know, a large part is concerned with dispute resolution. The first part repeals the statutory dispute resolution procedures introduced in the 2002 Act, which I welcome at least to some degree. I always felt that these procedures had an inhibiting effect on employees wishing to take their disputes to a tribunal. I can well recall when tribunals were first established to deal with individual workplace disputes. That was in the wake of the Donovan commission and its report.
The tribunals were intended to be easy of access for individual employees and fairly informal, where an individual would be able to present his or her own case. Union officials represented members before such tribunals. As a young official, I often undertook this work. However, as time went on, such tribunals and the law became much more complex and lawyers were more frequently employed by both sides. But ease of access to tribunals remains an important matter. It may be that the repeal of the procedures stipulated by the 2002 Act will assist this. It is of course true that conciliation can play a useful role in reaching a satisfactory settlement without people having to go to a tribunal. Of course, adequate disputes procedures at workplace level are also important, as is the right to union representation in such procedures.
Instead of the statutory procedures introduced in the 2002 Act, there is to be a code of practice, which I believe ACAS is working on with a view to its being ready when the Bill becomes law. But this produces a rather odd situation, in which we are debating the disappearance of one set of procedures without knowing what is intended to replace them. I do not find that very satisfactory. Perhaps we need to explore it further in Committee. Perhaps there is a case for waiting until we know what ACAS intends.
In the mean time, I still believe that easy access to tribunals is important, and not just for individuals. I have long felt that there should be some means of dealing with class actions. I remember feeling this particularly in equal pay cases. In trying to get the law applied, we had to find individual members and take cases in their names when we were really trying to secure rights for whole groups of members. In particular, there was a case for speech therapists, known as the Enderby case, with which I was very deeply involved. It took 11 years to resolve because there were constant attempts by the then Government to appeal at various stages. I am glad to say that a successful career followed for the speech therapist who was prepared to be our test case; she is now Dr Enderby at Sheffield University. However, a class action would have been much fairer and much less traumatic for the people involved.
In the case of individual dismissals, it is crucial that the individual has access to a system guaranteeing fairness. The loss of a job for many people is a deeply traumatic experience, which threatens not just financial difficulty but a loss of self-confidence and self-esteem, even sometimes threatening family life and marriage. Great bitterness may be involved and the individual will not be satisfied without his or her day in court. Incidentally, since the Bill apparently envisages a greater role for ACAS, we must be assured that ACAS will be provided with the resources to deal with these additional responsibilities.
The Bill also introduces welcome measures to ensure enforcement of the minimum wage and to increase the penalties and fines paid by rogue employers who do not pay the minimum wage. But do we have enough inspectors to ensure that enforcement actually happens? From what the Minister has said this afternoon, I understand that there have been 15,000 investigations and that there may well be more, but do we have enough people to carry out the inspections and thus ensure that people get what they are entitled to? Clause 7 also increases the compensation that must be paid to individuals who bring successful claims for unlawful deductions from wages. In future, tribunals will be able to order an employer to recompense a worker for financial loss experienced as the result of the employer’s actions, but would this include interest?
I am glad to see measures in Clause 14 to increase the penalties for agencies that commit offences under the Employment Agencies Act 1973, but what about agency workers themselves? Many immigrant workers secure their employment through agencies and they are often grossly exploited. The opportunity has been missed, in my opinion, to ensure that such workers—there are many of them; at least 1.25 million—are provided with equal employment rights. We are told that the Bill covers most workers, but with a sizeable proportion of the workforce omitted that is clearly not accurate. I hope that we will deal with this further in Committee, but in the mean time one of my erstwhile colleagues in the other place is introducing a Private Member’s Bill to try to address this omission by the Government. One way or another, the Government are going to have to deal with the whole issue of rights for immigrant workers, for agency workers and for people working on so-called contract—what at one time we called the “lump” when it applied to the construction industry.
Finally, I should like to deal with the important point of the right of unions to expel or exclude members on the grounds of membership of a political party. I understand why this has been introduced; it is an attempt to cope with the decision in ASLEF v UK. There has clearly been much consultation, but I wonder about the solution chosen. A union should have the total right to exclude those who disobey its rules. It is possible to indulge in activity of a racist character, conduct which is to the disadvantage of other union members, without actually being a member of a party. What is important is the activity itself. This could be further examined in Committee and may perhaps result in an attempt to amend the Long Title. In the mean time, much of the Bill I welcome; I look forward to further discussion in Committee.
My Lords, here we go again. Since what I consider to have been that dreadful day in May 1997 when my party moved from that side of the Chamber to this side, there have been no fewer than 28 Employment Acts, which is why I say, “Here we go again”. That is getting on for three a year, and the figure ignores those Acts not directly involved with hiring and firing, regulations and so on. Now, as the noble Lord, Lord Razzall, said, we are dealing with No. 29. Its purpose is to apply another sticking plaster to a hotchpotch of legislation, with some Acts rectifying areas found in their earlier, ill considered predecessors.
Before I deal with the Bill itself, I should like to tell the noble Lord, Lord Jones of Birmingham, that I am delighted to see him back in his place. After what was not exactly a fracas but a slight intervention when he mentioned that he would not necessarily be here for all the parts of the Bill as he would be travelling abroad selling trade for this country, and it was pointed out to him that his first duty is here in the House, I thought that, unusually, he had probably decided that enough is enough and that he would not come back for the rest of the debate this afternoon. That would have prevented me from thanking him for his courtesy in sending me a briefing note on the Bill to supplement the Explanatory Notes published by his department. It would also have prevented my asking him two questions that I am now going to put to him. I hasten to assure him, just so that he does not run out again, that I will not tax him with the vigorous statements that he made on the subject while he was chairman of the CBI, nor will I ask him how easy he finds the role of poacher turned gamekeeper. I would not dream of doing that to such a charming Minister. In fact, that role should enable him to answer my two questions easily.
First, when are the Government going to find time in the middle of the torrent of legislation that they constantly spew out to publish a consolidating Act to put all 29 Acts in one place? The noble Lord, Lord Razzall, asked the same question and I noticed that the noble Lord, Lord Jones of Birmingham, nodded his head as though he agreed. I hope that that means something will happen and that we will not have to refer to all of them when we want to sort out what is going on. There are 29 Acts in which some provisions have been amended or, as I said, repealed altogether. This is a totally confusing trap for the unwary employer and employee alike, who cannot afford to retain a high-priced specialist lawyer or have a personnel department—or, as it is nowadays pretentiously called, a human resources department—or have the backing of a powerful trade union or an employers’ organisation.
Secondly, when will the Government finally get the message, which I have repeated time after time in your Lordships’ House, that in employment law one size emphatically does not fit all? What is appropriate for a major industrial company or other large employer is not suitable for the owner of the local corner shop or for any of the thousands of other small businesses to which the Government and the CBI constantly pay lip service as what is often called the “engine of the economy”. Small businesses have to cope with 14 new regulations every week, imposed by a Government led by a man who promised to make a bonfire of regulations but who has so far failed even to make a start on it. Obviously that pledge has gone the same way as so many of the Government’s other manifesto pledges. I look forward with considerable interest to any reply that the Minister cares to give to these two questions. When I thanked the Minister for sending his note, I noticed that at the bottom of it he said that he would be delighted to answer any further questions, so I thought that I would start right away.
Turning to the Bill, I have only two comments, one of which directly relates to my point about one size not fitting all types of employer. I welcome the fact that the Government are now proposing to replace the arcane and convoluted process through which employers and employees alike have to go in the unfortunate event of a dispute, a procedure that lays traps for the unwary and in which one side or another can be deprived of justice, not because of a lack of merit in their case but because of a failure strictly to comply with some rigid, pettifogging piece of procedure. The existing complex procedure could have been drafted anywhere, even in a non-democratic country.
I draw your Lordships’ attention to two recent cases, one decided in favour of the employee and the other in favour of the employer. In Kennedy Scott v Francis, the employment tribunal, in the words of the report,
“bent over backwards to avoid a legalistic approach”.
It accepted that an employee who had attended a grievance meeting where his employer had taken notes was not to be non-suited because he had relied on the employer’s notes rather than submitting his own complaint in writing later. In Homeserve v Dixon, the appeals tribunal took,
“a very pragmatic and wide view”,
of the rules and held that an employee simply needs to be told that he is at risk of dismissal and why before a disciplinary hearing can take place. Hard cases make bad law. Why should employers and employees have to rely on tribunals bending over backwards or taking a pragmatic and wide view before a case can be dealt with on its merits and not on the basis of strict compliance with procedural rules? Why should there be a risk of inconsistent decisions between one tribunal and another when rules are rigidly applied or got around, depending entirely on the attitude of the chairman?
As your Lordships well know, I am not the sort of person who goes around saying, “I told you so”, but I did complain about the complexities of the procedure that is now to be amended, as my noble friend Lord Hunt mentioned in his excellent speech, when it was being enacted. I would have hoped that Clauses 1 to 6 would put an end to the strict formality in resolving disputes and that common sense would be allowed to prevail. However, I am afraid that the pendulum has been swung too far back by the very well meaning provisions of Clause 2. It repeals Section 98A of the Employment Rights Act 1996, which, very properly, allowed tribunals to find a dismissal to be fair even though the employer had breached some other non-statutory procedure where that breach did not in any way affect the outcome. As a result of the new Clause 2, a tribunal will again be required to find a dismissal unfair where the employer has not precisely followed the correct procedure, even though the dismissal was otherwise completely reasonable. In the decision of your Lordships’ House in 1988, it was ruled that all the tribunal could do in such a case was to consider reducing the compensatory award if it believed that the dismissal was inevitable.
In this very well meaning amendment, the Government have thrown out the baby with the bath water. I ask the Minister to consider amending the terse words of Clause 2 by importing some provision allowing a tribunal wholly to ignore what it finds to be an inconsequential breach of procedure by the employer. I do not expect the Minister to give such a pledge today but ask him for a promise that he will look into this aspect further and that before the next stage of the Bill he will have discussed the matter with employers’ associations and offered some suitable adjustment. That would be extremely helpful.
Secondly, I give a cautious—indeed a very nervous—welcome to Clause 17, which in effect allows a trade union to exclude from membership someone who belongs to a political party or organisation to which the union objects. The caution in my welcome to Clause 17 is to trust that it will simply not be the thin end of some witch-hunting wedge. I have no problem about excluding members of the BNP, with the focus of the case before the European Court of Human Rights. I have no problem about the exclusion of members of undemocratic organisations or parties whose aims are inimical to accepted public norms—say, for example, a terrorist organisation. However, where is the line to be drawn and who is to draw it? Could, for example, a union involved with workers in the nuclear or coal-mining industry exclude a member of the Green Party? Could the National Union of Mineworkers have excluded members of the Conservative Party in the 1980s?
The Bar Council Law Reform Committee says that the provision goes significantly beyond the European Court of Human Rights judgment in the ASLEF case and lends itself to potential abuse by trade unions. This is a classic example of gold-plating, to which the United Kingdom subjects the rulings emanating from European organisations many, many times. My noble friend Lord Hunt mentioned that as well. The Department for Business, Enterprise and Regulatory Reform is not living up to its high-sounding name when it indulges in this kind of practice.
I have just looked at the time and see that I have spoken for 11 minutes. There is no time limit, so I could go on—
All right, my Lords, I will continue.
DBERR is not being even-handed between workers and the unions when it claims, without a shred of proof, that there is no evidence of abuse by unions or of the arbitrary persecution of individuals. Those who do not learn from history are doomed to repeat it. The Minister will know only too well from his former career—I am now looking in the direction of the noble Lord, Lord Jones, not straight opposite at the noble Lord, Lord Bach—that the trade unions have previously indulged in the blacklisting of individuals and businesses. That is all in the past, of course, but it has happened: boycotts, intimidatory mass picketing, fly-picketing and so on. Entire former mining communities are still riven, almost a quarter of a century later, by the bitterness engendered by the politically motivated miners’ strike of 1984. I am not sure that we can honestly say to everyone, “You can trust the unions to do this properly”. Maybe we can trust them, but we have to be careful.
A simple provision in this clause would bring it back into line with the meaning of the ASLEF judgment. It is not too much to ask to give an excluded union member, or a potential member, the right of appeal. It is up to the Government to solve the problem of the right of unions to exclude those who could be regarded, by any test of reasonableness, as inimical to the fair aims of the union and the ordinary rights of an individual in a free society. Will the Minister agree to consult constitutional lawyers further—I know that the noble Lord, Lord Lester, is a fine constitutional lawyer and I am sure that he will have a view—to restore a proper balance between the two interests without leaving the unions with an unfettered and perhaps unassailable discretion?
As my noble friend has told your Lordships, we on this side of the House support the Government on the principle of the Bill—the noble Lord, Lord Bach, need not look so surprised—but that does not mean that we love 100 per cent of it. It is right at Second Reading to point out the slight errors that have been made. As the Government are apparently in a reforming mode, I hope, as I said, that they will continue to try to reduce the regulatory burden on businesses, large and small, and endeavour to make the law simpler and hence more easily understood by all.
My Lords, it is always a pleasure to follow the noble Baroness, Lady Miller. By my calculation, this is the 11th major employment Bill to come before the House since I came here in 1977. Like many of the previous Bills of this Administration, the Bill, like the curate’s egg, is good in parts. I welcome the measures to improve the enforcement of the national minimum wage and to deal especially with arrears payable in that regard. I welcome the clause to comply with the ASLEF judgment in the European Court of Human Rights, which seems to have received very little attention today. However, it will be necessary in Committee to examine carefully whether the Bill complies with what the Minister, in his kind briefing, suggested it should: namely, that unions must have a right to determine their membership.
I wish mainly to address the earlier clauses of the Bill, which rightly repeal the 2002 Act’s compulsory dispute procedures, which were unfair to workers, counterproductive and unnecessarily complex. No one who heard the passionate objections to those statutory procedures raised in 1991 by my noble friends Lord McCarthy and Lady Turner of Camden—eventually with some support, in the last resort, from the Conservative Party—will be surprised that I welcome their repeal. The question is, however: what replaces the compulsory dispute procedure? I apprehend that it will be agreed in all corners of the House that the best way to settle disputes at work is to have a speedy and efficient procedure agreed between the employer and representatives of employees for the settlement of disputes. That is the way to bring down the number of cases that need third-party enforcement through an employment tribunal, yet the Bill does relatively little in that respect. The only measure here, which is a sort of carbon copy from the 2002 Act, is the power of a tribunal to increase or decrease compensation after a case has gone to the tribunal, according to what is reasonable or unreasonable.
What are we left with as the relevant code of practice to which the Bill directs the tribunal’s attention? We are left only with the basic ACAS code of practice as a required relevant code. The Explanatory Notes state that the ACAS code will be the relevant code in almost all cases, yet at 3.10 pm today the Minister, from his semi-detached position on the Front Bench of the Labour Government, asserted clearly that the ACAS code would apply in all cases. That should be made clear in the Bill, otherwise uncertainty will only lead to unnecessary litigation.
Even the current ACAS code is designated by authorities on the subject, such as Professors Deakin and Morris in their book on labour law, as a dilution of the high standards of previous codes. Under the Bill, however, we shall not even have the current version of the ACAS code before us; it has been required to rewrite its code of practice on disciplinary and dismissal procedures and grievance procedures for workers.
I have two questions for my noble friend Lord Bach. First, why does the Bill not make it clear just when the ACAS procedural code is, and is not, the relevant code of procedure? Secondly, why cannot the Government delay the Bill until we can see the nature of the new ACAS code that is being rewritten? My noble friends have made that point already, but it bears repetition. To ask the House to pass the Bill before we even know what is in the new ACAS code is asking it to buy a pig in a poke. That is not satisfactory.
A further practical question of great importance arises. What will be the status of voluntary procedures agreed between the employer and the trade union, which is the vital nub of settling disputes at work? Is that procedure never to be a relevant code of procedure under the Bill? It is a pity that the noble Lord, Lord Jones, is not replying to this debate, although I am sure he enjoyed moving the Bill from the Front Bench for a Labour Government. The job of replying has been left in the capable hands of the noble Lord, Lord Bach, and I hope he can say something on those questions.
There is no sustainable evidence that the number of claims to employment tribunals is excessive. That is the only way at the moment that workers can enforce their rights. Everyone with any knowledge of the tribunals knows that we have a gigantic backlog of equal-pay cases and cases of age discrimination which the Bill might have said something about. There must be a way of dealing with that backlog, which is otherwise going to overflow into a huge wave of litigation—not perhaps the best way of solving it, but what other ways at the moment do workers have? What is wrong with the Bill in that respect is the absence of high-level socio-legal research before it was drawn up. Serious socio-legal work was done before most of the Bills of the past 10 years were drawn up—my noble friends will remember the reports—but not in this case. It has merely produced the Gibbons report, which, to be frank, was a genuine attempt to present an amalgam of anecdotal evidence and uninstructed comparative law, more like a draft student essay—with the greatest respect to the document. Of course, it supported ACAS, and in that respect I welcome it.
I turn to another feature of the Bill. There is to be a fast-track procedure when cases reach the tribunal which will have no oral hearing at all. It is a very grave question; what is the position of this bureaucratic, administrative, office decision that will replace a normal hearing? We are told that this will be done in a limited number of jurisdictions. Surely those jurisdictions should be enumerated in the Bill. What kind of access to justice is this? The Government will say that the Bill ensures that the fast-track procedure will apply only where both parties agree. Even on that basis—we must look at that very carefully in Committee—there is a question of how far it will offend Article 6 of the European Convention on Human Rights, which we have adopted in the Human Rights Act. It is very questionable whether the Government have got this right and have failed to take advice on the European convention in drawing it up.
I turn to deductions from pay by an employer. Noble Lords may think that in these modern, civilised days, rather than what my Italians colleagues call “savage capitalism”, improper deductions from pay are a rarity. Noble Lords might like to know that in 2006-07 there were some 35,000 complaints about unauthorised deductions. ACAS conciliated a settlement for about 7,000, and nearly 20 per cent of the rest had to be fought for by workers in a tribunal, asserting their right to a proper wage. The Bill would add to the worker’s remedies the right to claim financial loss in addition to what he can claim now in a tribunal. Why only financial loss? There are many sorts of loss that a worker and his family may experience if he does not receive his proper wage. That must be looked at in Committee.
I will make one remark about the nature of the tribunals, about which I agree very much with my noble friend Lady Gibson. There is at the moment very widespread concern that the position of the lay members of the employment tribunals is being undermined. One of the reasons for that is that the tribunals appear to come within the scope of the Ministry of Justice. One might have thought that it would have taken care to understand the nature of tribunals and employment tribunals, but it has not, as its recent document Transforming Tribunals, issued in 2007, makes abundantly clear. I ask for clarification of just how far the Ministry of Justice is likely to go in its campaign to downgrade lay members of the tribunals.
The Bill makes changes in the conciliation process. I agree with the noble Lord, Lord Hunt, that of course that overflows into mediation. ACAS does it quite regularly; we do not have to give ACAS some exceptional, alternative dispute resolution to do that. It understands conciliation and mediation, although the Bill makes it more difficult for ACAS to demand the reinstatement of a worker who has been unfairly dismissed. That is very important for us to consider further in Committee. I ask for one undertaking from the Government on ACAS. Will my noble friend assure us that it will be given full resources to do its difficult work in settling disputes at work and that any recent cuts in its resources and funding will be restored by the Government at a very early stage?
With those caveats, I welcome the Bill, and I look forward to Committee, although I am very unhappy that the Bill is being transferred to that graveyard of amendments, the Grand Committee, rather than being debated in a Committee of the whole House as it deserves.
My Lords, it is a great pleasure to follow the noble Lord, Lord Wedderburn, who tried to teach me the principles of contract law 50 years ago. I agree with much of what he said, and I wish that there were time for me to comment on what is to be done about unequal pay for women and what is to be done about tribunals and equality tribunals. But there is not time, and I need to concentrate on one matter only; Clause 17.
Clause 17 gives extremely broad powers to trade unions to exclude or expel someone for belonging to a political party, as has been explained. It contains no safeguards against the abuse of those powers. I am a strong supporter of the trade union movement, and looking across the House I am reminded that it has been a great pleasure to work with old friends and colleagues, sometimes representing their trade unions, in important cases. I believe that it is in the best interests of trade unions to accept the need for statutory safeguards against the misuse of their powers. With respect to the Minister, trade unions are not like other voluntary bodies, which is why they have been subject to legislative safeguards. The Strasbourg court referred in paragraph 50 of the ASLEF judgment to membership of a trade union as being a fundamental safeguard for workers against employer abuse. That is why membership of a trade union is a precious civil right.
Section 174 of the Trade Union and Labour Relations (Consolidation) Act 1992 gives a right for individuals not to be excluded or expelled from membership of a trade union, unless the exclusion or expulsion is for a reason specified by the section. Section 174(2) makes it unlawful for a trade union to expel or exclude a person on the sole or main ground of “protected conduct” by that person. “Protected conduct” is defined as membership or former membership of a political party. The 1992 Act provides remedies where the employment tribunal finds that a trade union has breached this right.
Clause 17 amends the 1992 Act in response to the judgment of the Strasbourg court in the ASLEF case. It removes all reference to “protected conduct”. The effect would be to enable unions to apply membership rules which prohibit individuals who belong or have belonged to a particular political party from membership of the union and access to the benefits of membership.
The Government’s consultation document published last May, to which I pay tribute, suggested two options for amending the 1992 Act to bring the law into line with the Strasbourg judgment. Option A was to amend Section 174 to ensure that there was no explicit reference to a special category of conduct relating to political party membership or activities. Where such political party membership or activities were “unacceptable” to the trade union, it would be lawful for the union to expel or exclude on those grounds. The consultation document correctly noted that option A would provide unions with much greater autonomy in deciding their membership. It noted:
“However, there would be no special safeguards against possible abuse”.
It also observed that such safeguards might not be necessary because,
“there was no evidence that unions would make use of their greater freedom by expelling members or activists of mainstream political parties”.
I am not sure that I like that reference to “mainstream political parties”, because parties outside the mainstream have rights as well.
Option B in the Government’s consultation paper was narrower and would contain safeguards against abuse. It would mean that the special category of conduct relating to political party membership and activities would be retained, but that the right not to be excluded or expelled for such conduct would be significantly amended. Under the Government’s proposal, the amendment would refer to the limited conditions under which it would remain unlawful for the union to exclude or expel an individual because of his or her political party membership or activities. Those conditions would specify that the union’s decision would be unlawful unless the political party membership or activity concerned was incompatible with a rule or objective of the union, and the decision to exclude or expel was taken in accordance with the union’s rules or established procedures.
The Government’s consultation document explained that option B,
“would specify particular safeguards against potential abuse. Those safeguards are based on the reasoning of the Court which noted the need for the trade union to avoid arbitrary behaviour and to act transparently in accordance with its rules. Many union rule books now refer to racist, xenophobic or extremist political behaviour as unacceptable to the union. So, little adaptation by those trade unions would be needed in order to comply with this Option. Where a trade union was required to amend its rule book, then members and potential members should gain because they would be properly informed of the potential consequences of their political actions. Option B might, however, create grey areas and give scope for legal action to arise about the precise meaning of a union’s rules or objectives”.
I make no apology for placing this before the House because it is important to understand that the Government have a choice.
Thirty-three organisations responded to the consultation, 26 of which were trade unions. Not surprisingly, on the principle that the Home Office enjoys the fact that power is delightful and absolute power absolutely delightful, the great majority of the unions and their lawyers preferred option A, and argued for unrestricted union autonomy and power. Like the Government, they appeared to believe that blanket powers given under option A would not leave grey areas or give scope for legal action to arise. I believe that that view is mistaken, as I believe that option B would be more likely to secure compatibility with the convention rights and avoid litigation. It is fair to add that those independent of trade union interests prefer the safeguards in option B or, in the case of the CRE, would support option A only if there were safeguards.
Article 11 of the European convention guarantees the right of everyone to,
“freedom of association with others, including the right to form and to join trade unions for the protection of his interests”.
No restrictions may be placed on those rights except in accordance with legal certainty and proportionality. Before the Strasbourg Court, the Government referred to the countervailing rights of trade union members and prospective members to freedom of expression and freedom of association, which they rightly pointed out would be engaged by expulsion from a trade union—under rights which are at the very foundation of a democratic society. The Government also, rightly, emphasised,
“the special status of trade unions which set them apart from other voluntary associations, pointing out that they play a potentially very important role in the working lives of individuals and exercise a direct influence over matters such as pay, holidays and other terms and conditions of employment”.
The European Court noted the importance of the right to form trade unions, stating that,
“Prima facie trade unions enjoy the freedom to set up their own rules concerning conditions of membership”,
and that as an,
“employee or worker should be free to join, or not to join a trade union without being sanctioned or subject to disincentives, so should the trade union be equally free to choose its members”.
However, the judgment contained this important statement of principle, worthy of John Stuart Mill in On Liberty. In paragraph 43, the court said that,
“pluralism, tolerance and broadmindedness are hallmarks of a ‘democratic society’. Although individual interests must on occasion be subordinated to those of a group, democracy does not simply mean that the views of a majority must always prevail: a balance must be achieved which ensures the fair and proper treatment of minorities and avoids any abuse of a dominant position. For the individual right to join a trade union to be effective, the State must nonetheless protect the individual against any abuse of a dominant position by trade unions”.
It went on to explain how that abuse might arise.
Clause 17 as it stands contains no safeguards against abuse; it does not require unions to strike a fair balance between the competing rights and freedoms. The remedy for the certification officer, for reasons that I can explain, does not deal with the problem—and in any event, the officer can deal with complaints only from members or former members, not with cases of arbitrary exclusion.
It is quite serious that a legal challenge could be made at common law not only for breach of the rules but also challenging the unreasonable or arbitrary nature of the rules. That is what used to happen a generation ago, in the bad old days when I was young, when the courts recognised, in Lord Denning’s words, that the rules of a trade union were more than a contract and that they were, a “legislative code” that should be controlled,
“by the courts just as much as a code laid down by Parliament”.
What this means is that the courts would have to fill the vacuum created by Clause 17 by striking down or restricting a union rule which operates in breach of the individual’s convention rights to freedom of association and expression. They would do so, I have no doubt, in applying the common law, or, in some cases, when the union performs a statutory duty, under the Human Rights Act. Surely that is much less satisfactory than including safeguards in the Bill itself, as contemplated by the Government in option B. Clause 17 could easily be amended to include safeguards that make the union’s decision unlawful unless the political party membership or activity concerned was incompatible with a rule or objective of the union, and the decision to exclude or expel was taken in accordance with the union’s rules or established procedures.
Option B would ensure that the principle of proportionality and the fair balance test would have to be applied, and would thereby reduce the risk of further breaches of the convention. I very much hope that the Minister will be able to indicate in his reply that the Government remain ready to consider option B and have not closed the door by choosing option A in the Bill.
My Lords, I am grateful to the noble Lord who has just spoken because I can curtail my own speech, which is related to Clause 17. I wholly agree with him that there is no safeguard against abuse in Clause 17 and that the clause cannot stand part, as there is no justification for it. I have in my notes what the noble Lord said about the rules—but again, I shall not repeat it.
I am totally at a loss with regard to what my noble friend Lady Miller of Hendon said about gold-plating for the trade unions. I do not understand this. I say in passing—I shall then conclude fairly swiftly—that I have very great respect for the noble Lord, Lord Bach. For many years we have discussed and disagreed in amity. In my professional past, I appeared for many trade unions, which is very surprising in that I usually appeared for the employers. I was on the cab rank, however, and if they instructed me, as they did, I appeared for them. I have always had great respect for them—and, indeed, in my early days in the House, I managed to achieve, with the noble Baroness, Lady Turner of Camden, an amendment to a Bill in favour of the trade unions against my own party. So there is no hard feeling in this debate.
One has to take very seriously the fact that the measure, even if it is amended, is a change of considerable consequence to our domestic law. Therefore, the burden is on those who propose the change to make good their case. I will not take time over it today, but I have considered it and I am rather concerned about how that case can be made good.
In that context, I also read the finding of the court against ASLEF—I am afraid one has to do that sort of thing if one is going to take part in the debate. We should bear in mind that ASLEF is a small union of train drivers and not one of the big unions concerned in the age of mergers. The finding was that the expulsion was lawful, albeit that Section 174,
“interfered with the freedom of association”,
because the trade unions had the freedom of choice about who should become and remain a member.
That resulted in a proportionate judgment. That is crucial, because in some of the literature that has been sent to us it looks as though what the unions really want is an absolute position. That should never happen. It is not in the interests of the trade unions, the employers, the individuals, the economy or anything that the provision should be resolved other than by a proportionate decision in accordance with compatibility with the Human Rights Act.
I am referring to this because there appears to be a misunderstanding in the letter of 27 December. I make no criticism because anyone who writes a letter on 27 December is probably not quite in their right mind. If you read that letter, you see in references to the benefit of the individual employers, trade unions, the public sector and so forth, that the dominance of absolute collective authority should be asserted. Those are my words; they are not in the letter, but that is the tenor of the letter. One must watch that. It is one of the reasons why one needs to watch with care how the amendment works; whether it can be proportionately applied and so forth. I shall not take any more time. I am grateful to your Lordships for having listened.
My Lords, I declare an interest: I am not only a member of Unite but I was president and one of the founder members of that union. I must say how pleased I am that my noble friend Lord Bach is back in his rightful place on the Front Bench. From what the noble Lord, Lord Jones of Birmingham, said, it appears that the noble Lord, Lord Bach, will be doing most of the work in Committee with us. Any questions that we have about the Bill we should direct to my noble friend Lord Bach. From past evidence, we shall get well informed as well as courteous replies from him.
I have several things to put to my noble friend. Most have been mentioned earlier, but it is as well to stress from this side of the House some of the possible concerns that we have about the Bill. First, I must say at once that I welcome plans to beef up the enforcement of the minimum wage. It has needed beefing up for a long time and also needs an increase in its budget. I shall return to that later. I also welcome the plan to give further powers to the Employment Agency Standards Inspectorate. However, like my noble friend Lord Wedderburn, I am concerned about reform of the dispute procedure. We must ensure that what comes out of that does not affect the position of employees or trade unions who, in many cases, are in vulnerable positions. That is something that we shall be looking out for as we go along.
Like everyone else who has spoken on this side of the House, I am concerned about the code of practice that ACAS is drawing up. I do not see how we can debate this Bill, particularly as there will be enforcement powers, without seeing that. It is nonsense. Surely, we in Parliament have a right to see it and to debate it—how do we know what will come up?—whichever view we may take on the Bill. I hope that my noble friend will take note of that because nearly every speaker has referred to it. We are being bound by something and it seems absolutely ridiculous that we do not even know what will be said. I can see that he is taking notes about that.
The noble Lord, Lord Hunt of Wirral, asked what future role ACAS would have. That also needs to be explained. We know what its role has been in the past. It has been for mediation, to encourage collective bargaining and to try to get disputes settled at an early point. All of us on both sides of the House want to see that, but I agree that if ACAS is to have new powers it has to have the funding to carry them out. I want to stress that at this stage.
I am also worried about ETs. The noble Baroness, Lady Gibson, expressed a lot of concern about them. In relation to what happens to ETs and their role in the future, we must preserve and safeguard the position of people in difficult situations who are often in non-unionised companies. We need to protect their rights and ensure that there is no narrowing of the access to justice. My noble friend Lady Turner said that everyone had a right to their day in court. We must make sure that people will not be kept away and that tribunal staff themselves will not filter and stop people from going who should have that particular right.
The noble Baroness, Lady Gibson, said that there has been a tendency to look at the role of the chairperson and to diminish the role of the lay member. We do not want a situation where the lay person is not counted and where those whom we will call judges if this provision goes through will have absolute power in many cases. The knowledge of lay members has been very valuable indeed in relation to employment tribunals. We do not want to see that lost.
I said that the enforcement of the national minimum wage has been weakened in recent years. I welcome the Government’s proposal to double the enforcement budget over the next three years. That is a very welcome but overdue move, as is the tougher stance to be taken on penalty payments. Another factor that makes that absolutely necessary is the growth in agency employment and labour migration. We must address these new circumstances. I welcome the right for people to opt out of having to buy extra services from an agency. Many of them seem to be bound hand and foot by agencies as regards obtaining not only tools and uniforms but accommodation, heating, electricity, council tax deductions and even advice on visa assistance and training. There is almost a new kind of slavery growing up with the agencies and it is right that we should give people the right to break away from that.
I agree with what my noble friend Lord Wedderburn said about employment rights for agency workers. It is a great pity that this was not settled in Lisbon and that it must now be settled domestically. A solution to this must be found. I say to my noble friends on the Front Bench that a great opportunity was missed in not putting this to bed on that occasion.
I notice that the Government have put forward various options on financial loss. They have talked about option B and calculating interest. It has been suggested that this could be difficult as it could involve compound or simple interest and that neither side would know what was happening. It is also suggested that there are tax problems in relation to this. The case against the measure is rather overstated. I cannot see why there could not be a separate rule for the national minimum wage arrears and an award—an additional payment based on the arrears. I cannot see that there should be a difficulty with that but I agree with noble Lords who said that it is not just the wage itself that should be paid; compensation also ought to be awarded. I cannot see why we cannot build that into it.
Much comment was made by noble Lords opposite about trade unions and the judgment of the European Court of Human Rights in the ASLEF case. We shall have long discussions on that in Committee so I shall not go into it now but my noble friend Lord Wedderburn said that we may have to look again at the Long Title and see where we stand on this. We need to look not only at what happened in relation to expulsion but what would have happened in relation to other disciplinary action that might have occurred. However, we shall return to that matter.
I welcome the fact that we are returning to employment law. Let us hope that finally we can arrive at a solution that benefits all parties, is simpler and enables us to resolve disputes earlier. I look to play my part in Committee as this Bill goes forward.
My Lords, I welcome the opportunity to contribute to an important debate on an important Bill. I was slightly disappointed to hear the noble Lord, Lord Hunt, say that the Bill has little to say about, and will have no effect on, job creation. That may not be its direct effect but job creation is not meant to be what it is about. It is important to see it for what it is—a necessary tidying-up exercise. Many noble Lords referred to the number of employment Acts introduced over the past 10 or, indeed, 20 years. I do not think that is important. If legislation is necessary to improve employment law, it should be brought forward. The fact that it is often so necessary may be regrettable, but that is a separate issue. So long as we are improving the law, I see nothing wrong with introducing legislation and I do not think that anybody today has suggested that this Bill will not improve the situation in a number of respects.
We should regard this Bill as, rather than being concerned with job creation, addressing the needs of those who already have a job and are entitled to be treated fairly in all aspects of their employment. I think that everyone has accepted that the 2004 regulations were not a success in practice in resolving disputes. The Government have maintained their commitment to review them. As we have heard often today, that has been done and now we look to move forward. Those who had to use the regulations often reported that they were too complex and too unwieldy, so their demise through this Bill is welcome. In some cases the regulations acted as a barrier to justice for employees in non-unionised workplaces. That remains an issue, although it has not received much consideration today. How will people without access to representation appear before an employment tribunal, should that be necessary? In principle, there is no barrier to their doing so but, in practice, the barrier is there and is sufficiently daunting to dissuade all but the most determined and, it has to be said, financially secure from proceeding.
As a former employee of a trade union, of which three other former employees are represented on these Benches in this debate, I had considerable involvement with industrial tribunals, as they were then called. In those days, it was customary for an individual in a unionised workplace to be represented by his or her union official and for the employer to be represented by the head of personnel, as human resources departments were called in those days. The situation has changed and it is has become increasingly a legal battlefield, which I think is unfortunate. Indeed, my own union, which is now known as Unite, has resorted to having lawyers represent members in many cases rather than its own paid, full-time officials. I think that that is a shame, not just because I very much enjoyed the tribunals but because it has made it more daunting for individual members to pursue them—the question of cost is always there and the outcome is also less than certain, even when they win, as I shall illustrate in a few moments.
That brings me to a nub of the issue, which is slightly between the lines of this legislation: the question of unpaid employment tribunal awards. My noble friend Lady Gibson of Market Rasen and the noble Lord, Lord Razzall, mentioned this point. We do not have any official figures on how many cases occur where an award is made but is not paid by the employer. It is difficult to take that matter forward because many successful applicants are unwilling or, indeed, unable to take the matter up with their employer or, as is almost always the case by that time, their ex-employer. Employers who do not pay out are simply irresponsible and that behaviour cannot be acceptable in any situation.
Citizens Advice has provided a briefing for this debate. I want to dip into it a little because it contains interesting and important information. The briefing states:
“The Bill contains no measures to make it easier for successful claimants to enforce employment tribunal awards made in their favour”.
The research by Citizens Advice and its paper published in 2004 show that at least one in 20 awards made by an employment tribunal is simply not paid by the employer. The tribunals have no powers to enforce such unpaid awards. Instead, if the employer has not paid the award within six weeks, the successful claimant must enforce the award through the civil courts. Not surprisingly, most do not. I refer to the Citizens Advice figures, which provide clear evidence as to why they do not. The range of fees involved include £45 for obtaining information from the debtor about their assets, which may be needed to help to decide how to enforce the debt, between £55 and £95 to issue a warrant of execution involving bailiffs possessing assets for sale to pay debts, £55 to take out a charging order on a debtor’s assets or property, £55 to order a third party, such as a bank or building society with access to the debtor’s funds, to pay the debt directly, and £190 to declare a company bankrupt as a means of recovering the debt. This concerns action that is required to be taken and funds that are required to be spent by someone who has won their case; they have already won and are now being asked to win it again. To me that sounds remarkably like double jeopardy and it is completely inappropriate that anyone should consider that to be acceptable. We have an opportunity to legislate and this loophole should be closed.
In his opening remarks, the Minister mentioned that some £9.6 million had been identified in respect of arrears of the national minimum wage, that 14,000 people had benefited through the various means provided by the Government and that £3 million had been recovered. However, a considerable amount remains outstanding. In its briefing for this debate, the British Chambers of Commerce says that a failure by any employer to pay wages in line with national minimum wage regulations is an anti-competitive practice that impacts negatively on the vast majority of fully compliant firms. I thoroughly agree with that; I do not think that anyone could disagree. However, if that is the case, why should there be a laissez-faire attitude to employers who refuse to comply with an employment tribunal award? Why should the onus to win fall again on the applicant who has already won? That is unjust and I invite the Minister to say in his summing up why no such provision is in the Bill. I hope that a suitable amendment will emerge in Committee to ensure that winning a case at an employment tribunal brings with it the award decided on after all the facts have been heard by that tribunal.
I turn now to the question of employment agency workers and enforcement. It is said that there are some 1.5 million agency workers in the UK. They are often the most vulnerable employees and it is the understanding of most people that the powers of the Employment Agency Standards Inspectorate are less than adequate to deal with the extent of the exploitation that many agency workers face. It is often said that rogue employers and, indeed, employment agencies have too much flexibility in the treatment of employees, especially migrant workers. Many examples exist of permanent workers working side by side with agency workers who do the same work and hours for radically different pay, conditions, holidays, pensions and so on. That is unacceptable. Of course agency work is acceptable for some people. It may fit family circumstances or other aspects—perhaps the workers are partly retired and in receipt of a pension. Of course there are circumstances where that is suitable; if the individual is happy with that, that is fine. However, many individuals are not happy with it and we have to legislate with them in mind.
I repeat the comments of my noble friend Lord Hoyle and many others that it is unfortunate that the recent Lisbon process was unable to reach a conclusion on equal rights for agency workers. However, the Government will soon have an opportunity to resolve the matter at a domestic level because, as my noble friend Lady Turner of Camden said, a Private Member’s Bill is to be put forward in another place by Andrew Miller, the Member for Ellesmere Port and Neston. He has at least something in common with me; he may not think that he has much in common, but we started our work for a union that was, back in 1977, called the Association of Scientific, Technical and Managerial Staff. It has gone through three name changes since then. He is at one end of the Corridor and I am at the other, but I certainly support what he is attempting to do in his Private Member’s Bill, which comes to the House of Commons next month. I very much hope that the Government will see what they can do to speed up the progress of that Bill. Opponents will say that it could cost jobs, lessen flexibility and cause harm in various ways, but I seem to remember that the same arguments were advanced 10 or 11 years ago when the national minimum wage was first proposed—and, of course, employment has risen in that period. Not too much time needs to be spent listening to the scaremongers. There are positive reasons for doing what is suggested in Mr Miller’s Bill and I hope that it will have the necessary support.
The strengthening of penalties for offences by employment agencies under the 1973 Act is to be welcomed, particularly the opportunity for cases to be heard in a Crown Court where there is no limit on the fine that can be imposed. There is also a proposal to increase the fines that can be imposed by magistrates’ courts to a statutory maximum of £5,000. I should point out to noble Lords who are not aware of it that last month the maximum figure in Scottish courts was increased to twice that amount. I hope that the Government will consider following suit at a suitable time in the not-too-distant future, because the potential increase could be a considerable deterrent for errant employers.
The doubling of the enforcement budget of Her Majesty’s Revenue and Customs during the next three years and the increased penalties provided for in the Bill are also welcome and will help, but not by as much as an extension of employment rights for agency workers would. I shall finish there. Like other noble Lords, I look forward to participating in the debates that will follow in the Committee stage of this important piece of legislation.
My Lords, as ever, I must emphasise that I speak as a non-lawyer, but I have been a frequent customer of the employment laws for a long time, often in difficult and complex circumstances. As such, I was extremely surprised and concerned, in the debate on 17 December on the statutory instrument on employment agencies, to discover that aspects of the law that were apparently set down in the 1978 employment legislation had been widely, easily recognisably and consistently broken since then and that the Government appeared to be unaware and not in the least bit concerned about that. In response, they actually asked me for evidence of where those breaches were occurring. I hope that the Minister, the noble Lord, Lord Bach, found in his e-mail the answer to that question; I sent him details of at least half a dozen of the companies concerned in that breach.
My concern this evening is that it is quite unreasonable that a Bill of this importance, which effectively, by implicit consent, endorses the breach of those laws, should go forward. It does not set out to rehearse them and ensure that they are understood. These breaches are surely failures of comprehension, clarity and rigour in the management and application of the law. The first breach that concerns me relates to the requirement enshrined in the original 1978 legislation and reiterated in the statutory instrument passed by this House on 17 December that no fees should be taken by an agency from a jobseeker; they should be taken only from a job provider. This requirement has been breached for a great many years through the function known as the outplacement agency, whereby a redundant executive goes to an agency and asks it to represent him in finding job opportunities for which he can apply. The agencies appear to have been in breach for most of the past 39 years or so by ignoring the fact that they cannot take the fee directly from the jobseeker. That is still happening to this day, although to a very much lesser extent than used to be the case.
During the debate on 17 December, I witnessed considerable surprise on the government Front Bench when I announced that at times the fees for representation by these agencies were as high as £2,000 per month per individual. That figure is correct. Since then, I have been doing further research and have found that the agencies have now decided that they are not strictly outplacement agencies according to the old concept but consultant agencies helping to improve candidates’ prospects of getting a job by being better groomed and turned out and by putting them through a process of mock interviews to prepare them for the rigours of getting a job at the tough end of a market. That would be all very well except for the fact that their fee structures still range from a simple £500 for teaching someone how to dress for an interview to £5,500 for teaching a person how to access a database that will tell them where the opportunities are and enable their CV to be better prepared and written.
These agencies also provide the opportunity for people to spend time on their premises, where they are given an endless supply of coffee and access to newspapers and databases. In some cases, as sadly I know, people who have been made redundant have not told their wives that they are out of a job but have hidden in these places throughout the day, spending their entire redundancy money there until it has all gone. In one case, an individual was found in his potting shed three weeks after he had died—his wife had left him. Therefore, these places have a dubious background and ethic, and it is wrong that they are not regulated or brought within the compass of the Employment Act. I invite the noble Lord, Lord Bach, to consider whether the Government can introduce their own amendment to provide for at least the establishment of a code of practice whereby these organisations would gather together in a trade representation body and agree to be bound by sensible rules enshrined in the law. I do not think that they should be allowed to continue in this undisciplined manner any longer. That is my first, serious concern. If the Minister has an appetite for it, I can provide him with half a dozen names for him to investigate in addition to those that I gave him this morning.
My second concern is one on which we have to be very cautious because it deals with a matter that is sub judice. I shall not identify it but it deals with the group or collective block-booking of large numbers of temporary staff for a single assignment—for example, the catering staff for a sports event. I refer to a number of young people who live away from home and not necessarily in well controlled conditions as regards their upkeep, welfare, moral oversight or anything else. These young people are block-booked and I am concerned about the pressures that they are put under and whether the agencies exercise due responsibility for their moral and physical welfare.
That matter was touched on in our debate on Regulation 7 of the instrument that went through on 17 December but I do not believe that it was addressed anywhere near toughly enough. Since then, there have been some unfortunate allegations of misbehaviour elsewhere in this country, which, had they come about a week earlier, would surely have provided a different focus for our debate on that instrument. Therefore, again I ask the Minister to consider the possibility of correcting the imperfection of the regulations passed on 17 December by bringing about a stricter, more vigorous and more rigorous control over the future recruitment of temporary staff by that sort of block-booking, because I think that it is quite wrong as it stands.
Those are the two concerns that I present to your Lordships with a specific request for amendments. I think that it would be better if those amendments came from the Government and I invite them to consider that.
I wish to raise two other points, which are requests for clarity. The first relates to the apprentice system, which is a matter for later debate. My recollection of apprentice control dates back to my days of running a very high-skill shop floor, when we were heavily dependent on toolmakers and so on. Over the past few days, I have been asking some of my former colleagues what happens today. They all looked at me and said, “We didn’t know that you had taken the title of ‘Lord Dinosaur’”. “Why so?”, I asked. They replied, “We don’t have anything like that nowadays. We don’t bother with those high skills any longer. We just buy it all from Italy. We don’t need apprentices in high-skill categories”. When we come to look at the apprentice issue, could we consider whether there should be a more positive, proactive element in the Bill to bring about more unity between the workforce, management and unions by sponsoring the return of some of those higher-grade skills? They do not appear to be there at the moment and this would surely be a good opportunity to encourage their reintroduction.
There was once on the government Benches the great and much lamented Monty Finneston. In 1977, he wrote a magnificent report in which he was all too prophetic about what would happen to the skill base of British industrial society. Because it was so good, it was largely completely ignored and unused but it provided an absolutely brilliant analysis of what the future held, and that is what we have today. There are no skills and very little high-skill industry. There is all the electronic stuff but that is what we have learnt latterly. We still do not produce the good industrial floor skills that we had. My noble friend Lord Hunt said that we should be looking at job creation, but what about job protection and protecting the skills that we have and what is left of British industry? Are we doing enough to bring about a positive factor involving the co-operation of the unions and management?
In my time, the shortfall in apprenticeships lay in the fact that the unions would not sanction the payment of an adequate wage for an apprentice because it would eat into the wages of the master teaching him. That is no longer a factor and to some extent the situation is covered by the minimum wage, but should there perhaps be a separate and higher minimum wage for people taking high-skill apprenticeships? That is the only way that they will be kept going through the five long years of serving to become a toolmaker. Without it, we will not succeed in providing an adequate additional incentive. Those would-be apprentices could certainly earn enough to marry a pretty girl at the age of 19 by being a bus conductor but they could not do so by being a tool apprentice. That is something about which the Government should think very hard in the debate on apprentices.
My final point is also a request for clarification. One factor that has been a thorn in my side but which I would not be without is trying to work within TUPE. As I said, it is a pain that I do not wish to be spared. I should like to know whether TUPE is a British institutional law that will work independently and whether it will be secure against the privations and invasions of Europe. For example, if I sell a business in Basingstoke and its assets to a company in Bradford and I have 500 unemployed people in Basingstoke, I have a responsibility for those people, regardless of the fact that the expanded market may produce 1,000 jobs in Bradford. That is fair enough, but under the present laws I would have a potential liability of £50,000 per head for the people whose jobs were transferred to Bradford. That total of £50,000 a head for 500 people would be too much, so I would not go ahead with the deal. However, what would happen if, instead, I sold my company in Basingstoke to a company in Bayonne or Hamburg? Would I have the same rights and the expectation of being able to call on the same compensation, and would it have the same impact on the viability of that deal? I should like clarification on how far TUPE is matched by European law or whether it comes outside that law and can be subverted, diverted or avoided.
Those are serious points which should be considered. The first two are essential for inclusion and on the latter two I seek clarification.
My Lords, I start with a double declaration of interest. I am a member of the trade union Unite and I also sit as a member of the Employment Appeals Tribunal.
In his introduction to the Bill, my noble friend Lord Jones of Birmingham said that it was predicated on the twin pillars of economic prosperity and social justice. Although I can see much economic prosperity, I am still searching for the same degree of social justice, and I shall say a little more about that later. For now, I draw attention to the proposals on the national minimum wage. The emphasis for change is not that low-paid workers are being exploited by unscrupulous employers, but that some employers complain of undercutting by their competitors who do not pay the minimum wage. The emphasis on enforcement for non-payment of the minimum wage is not on the failure to pay, but on the failure to comply with the enforcement notice.
The key principles of the Bill are rightly focused on a number of fault lines in the current employment legislation which need to be addressed; for example, the structure for the resolution of disputes. Therefore, the Bill offers a real opportunity to rebalance the current provision for dispute resolution, including the employment tribunal process. Here I fully support my noble friend Lady Gibson of Market Rasen, who expressed her concerns about employment tribunals. Under successive Administrations, the key pillars of the employment tribunals have stood the test of time. That is to say, tribunals have benefited from the knowledge and experience which lay members from both sides of industry bring, ably supported and guided by the eminency of a learned chairperson. It is important that the current safeguards are preserved, but it is most important that access to justice is maintained. I hope that, in his response and through the various stages of the Bill, the Minister will assure the House that this delicate but constructive balance will not be put at risk.
We all want to get rid of rigidity and unnecessary red tape in the labour market, but as the labour market develops an even greater degree of flexibility, so the need for better employment safeguards increases. Reading the Explanatory Notes to the Bill, one could be forgiven for thinking that the provisions are addressing a balanced relationship in the workplace on the issues raised. But nothing could be further from the truth. That relationship is not about equity of resources—resources have not been deployed equally in industrial tribunals for those whom the Bill aims to help the most—it is about access to justice.
Although I very much welcome the principles in the Bill, it is still a Bill of missed opportunities. There are two particular areas of disappointment. First, the Bill misses the opportunity to do basic justice to agency workers. My noble friend Lady Turner of Camden and other noble Lords have already drawn attention to the proposed Private Member’s Bill coming from another place. The scale of the problem is set out in a recent article by the Member who intends to promote that Private Member’s Bill on agency workers. He freely admits that many of the 1.4 million agency workers in the UK are treated well and enjoy the flexibility that that pattern of employment provides. For the majority of them, however, it is a very different story. He describes a firm in his constituency where workers were employed for 15 years as temporaries. The matter came to light only when the firm closed and those agency workers received not a penny in redundancy pay after 15 years. One can only describe that not as temporary employment but as permanent abuse. As I said, although I can see the economic prosperity in that scenario, I fail to see the social justice.
The article describes the three-tier labour market, each tier on different terms and conditions, made up of the directly employed, agency workers and casual workers. Bottom of the bottom are the council cleaners, some of whom might even be working in Whitehall, lined up at 5 am waiting to find a day's work, waiting to see whether they will be picked. It is reminiscent of the pre-war period of casualisation in the docks industry, when dock workers had to enter what was called “the pen”, waiting to be inspected and hoping to be picked by the supervisor for a day’s work. No one in this House can imagine the sense of shame and worthlessness of having to return home and confess to your family that you were not picked for a day’s work. Let us be clear: all of this as it currently applies to agency workers and to casual workers is legal. It is being done in our name and in the name of the flexible labour market. It may bring economic prosperity but it certainly does not bring social justice.
What has been our Government’s response to this exploitation of agency workers? Let me tell you. Our Government have worked tirelessly to deploy as much resource as possible to block the European directive aimed at giving rights to agency workers. Indeed, it is not too strong to suggest that the Government worked tirelessly to maintain legalised discrimination against agency workers. That may be in the name of economic prosperity, but it certainly is not social justice. Some will argue, as has been said today, that such practices will ensure continued employment. Tell that to the people waiting in the pen from five to nine without being chosen. Up and down the country there are thousands of first-class agency workers who are keeping the economy going but are treated as second-class citizens.
The second area of missed opportunity is the failure to extend to other employment sectors, such as construction, the legislation regulating gangmasters in the agricultural industry. Make no mistake: there is an army of gangmasters in the construction industry and their behaviour is infinitely worse than that which motivated the regulations to control gangmasters. The plight of agency workers which I have described is liberated luxury compared with the conditions of abuse and exploitation suffered by workers in other sectors of the economy. It may be legal but it certainly is not moral.
Finally, I have some difficulty with Clause 17, which proposes the exclusion of trade union members. To be judged by our actions—on what we do, not on what we are members of—has long been a cherished tradition of freedom and liberty in our country. Having examined Clause 17, I ask myself where unacceptable membership starts and where it ends. What organisations will be proscribed? Is there a list that will form an addendum to the Bill? Who will be the judge? Where are the safeguards? Is this the first step not only towards expelling someone you do not find favour with but to banning the organisation to which they belong? It is just one small step. I ask the good people of Barking to forgive me, but I believe that Clause 17 is barking mad.
My Lords, there is fairly general agreement on and support for this Bill—apart from the previous speaker’s trenchant remarks—although of course some concerns have been raised. It was particularly encouraging to hear the Minister say that it will lighten the regulatory burden on business and to hear talk of the saving of millions of pounds for business.
There are encouraging signs, but as always I am sure that the Minister will forgive me if I say that we wish to wait and see. I hope that it will be so, since on these Benches we see this as only a start—one of many in the past—of reducing burdens. As my colleague my noble friend Lord Razzall said, more could have been done even now in a number of areas of the Bill. At this point, I repeat the call that we have made here and in the other place frequently, and which we will continue to make, for effective regulatory impact assessments.
My colleague also spoke about the possibility, among others, of a fair employment commission. We on these Benches feel strongly about the need for consolidation, this being the 29th piece of legislation, so there is still much to be done. It was welcome to hear the noble Baroness, Lady Miller, robustly agree with us on that point—as of course did the noble Baroness, Lady Wilcox. The point was well made by my noble friend Lord Razzall that those on the Conservative Benches must tread with care—as they do—since it has frequently not been clear whether they have been for or against many employment regulation Bills that have helped the workforce enormously. I can attest to that having scrutinised many Bills while I was in the other place—particularly on the national minimum wage legislation. I can tell the noble Lord, Lord Wedderburn, that the Conservatives do not always squeak. They certainly did not squeak when we debated the National Minimum Wage Bill; they were robustly, loudly, vociferously and at length against the national minimum wage, as I can attest by the Committee sitting we had that went on for 24 hours. I note that the Minister nods. We very much supported the national minimum wage and I am glad that the Conservatives have finally seen the light. We have always supported the national minimum wage. Indeed, even at this stage, we are still somewhat concerned about young people getting a fairer rate than they do now. But it is welcome that the Bill will strengthen its implementation and introduce strong penalties.
On workplace dispute resolution, many noble Lords have raised points, which we welcome having the opportunity to discuss in Committee. The matter of the definition of people’s status has been referred to, whether employed or self-employed. I am sure that the Minister will recollect IR35 when status seemed to be decided by the tax authorities.
I turn to Clause 17, about which my noble friend Lord Lester and others have expressed concern. As he said, the clause gives broad powers to trade unions with no safeguards against abuse of those powers. I join my noble friend in paying tribute to trade unions and their work. He said that there is concern about the words “mainstream political parties”. My colleague addressed various points with clarity and in great detail, and raised the issue of adopting option B as opposed to option A. I hope that the Minister will make a positive response to that point.
In conclusion, there are many other issues that we are looking forward to debating in Committee. We on these Benches broadly support the Bill in the hope that it will reduce the burden on employers and increase fairness for all—especially for employees who have been and are unfairly treated by rogue employers over the minimum wage, or at least the lack of its implementation.
My Lords, I start by offering a little advice to both the Liberal Front Bench speakers who seemed to devote most of their time to attacking this party. I advise them that it might be worth marching towards the sound of gunfire in future. The opposition is opposite.
My Lords, the noble Lord, Lord Henley, is being seriously silly. I spent 10 seconds attacking the Conservative Opposition and my colleague, my noble friend Lord Cotter, probably spent 12. That is 22 seconds out of 20 minutes, which is not spending all of our time attacking the Tory Party, however justified that might be.
My Lords, the noble Lord is being oversensitive. I suggested to my noble friend that it smacks slightly of a faint element of Stockholm syndrome, but I shall leave it at that. I shall explain the syndrome later if the noble Lord so wishes.
I start by offering my thanks to the noble Lord, Lord Jones, particularly for the letter that he so kindly wrote to us on 27 December. We admire his hard work and admire the fact that he took the trouble to come back from—I presume—Birmingham on the train, if it was working, or perhaps a ministerial car brought him back to Victoria Street. It is an important letter because, as the noble Lord, Lord Hoyle, reminded us, the noble Lord, Lord Bach, will hold an open-house-style briefing session in the House of Lords. The noble Lord, Lord Hoyle, put the point bluntly and said that he very much hoped that the noble Lord himself will take that briefing session. We appreciate that the noble Lord, Lord Bach, is an experienced Minister and has served in a number of departments in this House. But this is the Bill of the noble Lord, Lord Jones. He has put his name to it and he has made the declaration that the Bill is compliant with the European Convention on Human Rights. He is the one responsible for the Bill and is answerable to the House, so he ought to be at that meeting.
Secondly, as the noble Lord will know—this point was raised by my noble friend Lord Forsyth and others—we have agreed to take this Bill in Grand Committee in the Moses Room. I understand that the usual channels have already put together dates, which I have in my diary. It would be only right if we could get an assurance from the noble Lord—if he wants to interrupt me now—or a commitment that will have to be made by his noble friend Lord Bach that he will be present for the Committee stage of the Bill.
I have been in this House for a number of years. I served as a Minister for some eight years so I know of the pressures on ministerial diaries and that we have to do other things on occasion. I know that Ministers sometimes could not be present for the whole or some part of a Bill. Illness may have taken them away, or something else, but in the main in all the 30 years I have been in this House—as long as the noble Lord, Lord Wedderburn—I have always known Ministers to make every possible effort to be there for Committee and later stages of Bills. I have never asked this before, but on this occasion it is right to seek a firm commitment from the Government that the Minister will try to be here for the Committee stage of the Bill. One of the reasons why we have Bills in the Moses Room is to give greater flexibility on dates to allow Ministers to fit them into their diaries. If the Minister has other duties that will take him away on the dates that have been discussed by the usual channels, I am sure that we and noble Lords on the Liberal Benches will be prepared to look at our diaries to find other dates that will suit the Minister, but all of us would like to see him take the Bill—his Bill—through all its stages in this House.
That brings me to the question of consolidation. I find I am in agreement with both the Liberal speakers on this occasion—it is rather nice to be in agreement with them. As many noble Lords will know, the Bill was originally entitled the Employment Simplification Bill. We know that the Government are very keen on spicing up the names of their Bills to imply that they do more than they possibly ought to, just as they spice up the names of their departments. The Minister now represents something called the Department for Business, Enterprise and Regulatory Reform—whether it achieves any of those things is another matter. This Bill was originally called the Employment Simplification Bill and it is now purely the Employment Bill—simplification has been dropped. Is that an admission that for all its good intentions—and there are some good intentions in the Bill—it does not amount to very much, as my noble friend Lady Wilcox put it and that, as my noble friend Lord Hunt put it, it lacks a theme? Like Churchill’s famous pudding, the Bill lacks a theme and does not amount to very much. It simply further complicates the statute book and brings in further unnecessary complications.
As my noble friend Lady Miller and the noble Lords, Lord Razzall and Lord Cotter, put it, we need consolidation. We have had 29 Bills relating to hiring and firing since 1997 and I imagine that we have had 10 times that number of statutory instruments. Can the Minister say whether that figure is correct? How many more regulations will the Bill bring in? Since it was originally called the Employment Simplification Bill and comes from the department for regulatory reform, how many will it repeal? In passing, I shall say that I am quite grateful to see that the first two clauses relate to repeals.
With all this extra complication, how can the poor employer, especially the small employer, cope? The Minister, with his former responsibilities and experience at the CBI, might feel he knows all about big business, but he does not necessarily know much about how small businesses cope. Does the Minister accept just how difficult it can be to employ people? I do not know whether he has come across the recent survey, which was referred to earlier, that found that one-third of businesses are prevented or deterred from employing people by the complexity of the legislation, particularly when it comes to getting rid of people. If you cannot fire people it is very unlikely that you will want to hire them. What does the Minister say to that? The case for consolidation seems to be overwhelming.
I shall turn briefly to the Bill, which was described by my noble friend as lacking a theme. As the noble Lord made clear to us, it is in four parts. The first part deals with dispute resolution. In it we see the abolition of something brought in by the Government only two, three or four years ago. It seems to be an odd way of proceeding first to legislate, then to announce a review of that legislation and then to repeal it. I suspect that life might be easier if the Government accepted a few more of the sunset clauses that we occasionally suggest. It would save them the trouble of repealing parts before they brought in further changes.
Like others, I noticed with amusement that the noble Lord, Lord Wedderburn, felt rather deeply that the role played by him, the noble Lord, Lord McCarthy, and the noble Baroness, Lady Turner, in the opposition to the part brought in in the 1992 Act had been underplayed. In turn, he wanted to underplay the part played by my noble friend Lady Miller. We all know that she does not squeak. I was her Chief Whip for some years, and I know with some pain that she does not squeak and can howl and roar just like the best of them. The simple fact is that we did oppose it, as did the noble Lord, and the Government are now repealing it. The important thing is to ask them what next? As was stressed by my noble friend Lord Hunt, the noble Baroness, Lady Turner, and the noble Lord, Lord Hoyle, it seems to be difficult to know how we can discuss these matters if we cannot see the codes themselves, in particular, those in Clause 3(2)—if I have got that wrong, I am sure that the noble Lord, Lord Bach, will correct me. It is important to say to him that we want to see them. When will we see them? Can we have an assurance that we will have something to see—in the form of those codes—before we get to Committee stage? If not, could Committee stage possibly be delayed? It might also be convenient to delay it a bit longer for the noble Lord, Lord Jones. As the noble Lord, Lord Wedderburn, put it, we need to remove the uncertainty in the Bill.
Turning to the national minimum wage, I echo everything that the noble Baroness, Lady Gibson, had to say about the cadet force adult volunteers. Like the noble Lord, Lord Bach, I served for a short while as a Minister in defence, and I hope we did what we could to support them. We always looked for a great deal more support from all other aspects of the Government and all other departments. I am very grateful that here is another department doing its bit to support the work of something that emanates from the Ministry of Defence but benefits the whole of society—the cadet force movement and the work of the adult volunteers. In passing, I shall put one brief point to the noble Lord in a genuine spirit of inquiry. It is something that we might want to come back to in Committee. Are there any other volunteers or people in an analogous position who might also have to be considered? For example, there might be some people in the TA or retained firemen. Are there others? I hope that the noble Lord will give that some thought—we will give him an opportunity to give it some thought when we reach Committee stage.
There are one or two other Committee points that we will want to pursue at a later stage. In particular, I understand that offences will now be triable as indictable offences, not just summary offences, which will mean higher levels of fines. I move over employment agencies because that involves detail that might be more appropriate for Committee stage.
The fourth aspect of the Bill is trades union membership—ASLEF v UK. The noble Lord, Lord Morris of Handsworth, said, with apologies to the residents of Barking, that he thought that this was truly barking. If one does not want to go that far, one might say it is at least two stops short of Barking—Upton Park. We can look at that in due course. The general point, however, that seemed to emerge from those who spoke—I am especially grateful to the noble Lord, Lord Lester, and my noble friend Lord Campbell of Alloway—was to stress, following the considerable unease expressed by my noble friends Lord Hunt and Lady Wilcox, that there is no safeguard against abuse. That is our concern and that is what we want to pursue at a later stage of the Bill, whenever that may come.
I look forward to the Committee stage. I repeat again that it is important that the Minister should make himself available to the House. I regret having to put it in those terms, but because there seems to be some doubt, it is important to do so. We look forward to Committee and later stages of the Bill and, this evening, we especially look forward to the reply of the noble Lord, Lord Bach, on behalf of the Labour Party.
My Lords, first, let me say what a pleasure it has been to listen to this Second Reading debate. There is a huge amount of expertise on all sides of the House in this field and the speeches have been extremely powerful. The speech of the noble Lord, Lord Lester, was powerful. On my side, if I may mention it in particular, not to embarrass him, the speech of my noble friend Lord Morris of Handsworth was powerful.
This is an interesting Bill, which has been criticised for being something that it has never claimed to be. It is really a bits and pieces Bill in dealing with employment law—nothing wrong in that, I think—concerning major and important issues. Indeed, I do not think that we should have had such powerful and impressive speeches if it had not raised such issues. It is not a minor piece of legislation by any means, but please see it for what it is and let us judge it on that basis.
The noble Lord, Lord Henley, said—I think probably tongue in cheek; I hope so, for his sake—that this is an odd way of legislating: to legislate, agree to have a review in a couple of years and, if the legislation is working well, not repeal it, but if parts of it are not, repeal them. That seems to me, as it did to the noble Lord, Lord Razzall, an immensely sensible way to deal with complicated matters such as this.
The noble Lord, Lord Hunt of Wirral—I thank him very much for his kind words, but I knew that a “but” was coming eventually—talked about the Bill not being about job creation. I think that my noble friend Lord Watson dealt with that to some extent. No, it is not a Bill about job creation, but I think that we will all agree—I know that the noble Lord will from his time when he was Employment Secretary—that the better employment relations are, the better it is for economic success in the country. In that sense, a Bill that is aimed at better employment relations goes to the heart of whether we remain a successful economy.
I am sorry that the main opposition party does not really support the Bill. I was hoping for words of support from the Front Bench, but I never got them. I was disappointed. The Liberal Democrat Benches were much more favourably inclined. The CBI, the voice of business, is very encouraged by the Bill and supports it a great deal. I make no apologies whatever for pointing this out, especially to the Conservative Party opposite. It states:
“The CBI welcomes the Employment Bill and supports its major provisions. The Bill provides a balanced package of measures which will help promote the resolution of disputes … and protect vulnerable workers”.
Not bad. Even noble Lords opposite may have received the TUC’s comments on the Bill. It, too, in general terms, supports it—not completely, but it supports it. On this occasion, as has perhaps been true about industrial relations for a long time, the party opposite is the party out of step.
As for employment, we heard comments about difficulties there. I point out to the House, if I may, that employment in the UK is at its highest level since comparable records began, with 29.3 million people employed as at October 2007. The employment level in October 1997 was 26.6 million, so that represents a 10 per cent rise in the number of people in employment since October 1997. By any standards, that is not a bad record.
I want to deal with as much as I can in the limited time available to me. If I do not succeed in answering everyone's questions—of course, I will not—I will try to write with the answers to particular questions. We know that many of these issues will come up in what will undoubtedly be a fascinating Committee.
On consolidation, the Department for Business, Enterprise and Regulatory Reform is undertaking a major project to improve and promote guidance on the body of employment law. That is projected to save £365 million per year by 2010 by reducing the cost of understanding and complying with employment law. That is as far as I can go in answering the questions about consolidation. A fair point has been made all around the House about that.
What is the Bill trying to do? It is trying to strengthen and clarify key aspects of employment law. In doing so, we believe that it will improve the effectiveness of employment law for the benefit of all: employers, trade unions, individuals and the public sector. Importantly, we argue that it brings together both elements of our employment relations strategy: on the one hand, increasing protection for vulnerable workers; and, on the other, lightening the load for law-abiding businesses. I argue that that is exactly what the Bill does.
There are four parts to the Bill, and I shall deal with them as shortly as I can. Dispute resolution is one. The national minimum wage is second. Employment agencies are third. The fourth is the vexed issue about which we have heard especially impressive speeches: Clause 17. I will not do justice to any of those four tonight, but let me try to deal with some of the issues that arise from them.
On dispute resolution, in Clauses 1 to 7—praised even by the party opposite for their deregulatory effect; I am grateful for small mercies—the Bill provides for the repeal of the statutory dispute resolution procedures and implementation of a package of replacement measures aimed at ensuring that the underlying principles of good practice in resolving workplace disputes are followed, while removing inflexibility and reducing administrative burdens. Many noble Lords wanted to know about the package. It includes statutory changes, revision of the ACAS code on disciplinary grievance procedures—I shall say more about that in a moment—and substantial investment to improve advice to employees and employers and to provide additional ACAS conciliation services. Through those measures, we seek to encourage more early and informal resolution of disputes.
As regards some individual questions raised, the noble Baroness, Lady Miller, made the very important point that one size does not fit all. She is absolutely right. We need some flexibility. The dispute resolution provisions will abolish what has turned out to be a fairly inflexible statutory provision. The chair of ACAS has confirmed that the revised code on discipline and grievance will be short, principles-based and proportionate. My noble friend Lord Hoyle asked about the role of ACAS, and other noble Lords, including my noble friend Lord Wedderburn, were also concerned about that. ACAS will continue to have its current role in conciliating disputes. We are going to invest new resources—the noble Lord, Lord Hunt, was also concerned about this—in disputes which are not yet the subject of an employment tribunal claim. The Bill will enable ACAS to use these resources to best effect where it is needed to conciliate in pre-tribunal disputes.
Why does the Bill not state when the ACAS code is the relevant code for the purpose of tribunal judgment? The tribunal has a duty to take into account any procedural provision of a code which appears to be relevant to the proceedings being decided. My noble friend Lord Wedderburn went on to ask why we could not delay consideration of the Bill until we have the revised ACAS code. I know that there is strong feeling around the House that it has not seen enough yet. I understand that. I want to be careful in the words that I use now, so that they are not held against me in the future, although I am sure that no noble Lord would be so mean as to do that. I will do my utmost to ensure that a draft copy of the ACAS code is with noble Lords by the time we get to Committee. I make no promise that that will happen, but I will do my utmost—and my noble friend Lord Jones agrees that he will, too—to ensure that it does. The point is well made: a draft copy of the code is necessary. However, those who have been in and know about government will know that these things are not always quite as easily available as we would like. I hope I have dealt with that point and the one about resources.
Alternative dispute resolution is an important issue. We agree that mediation often provides an excellent way to resolve disputes, and will invest resources in improved advice for people in dispute that will include advising on all the potential mechanisms for resolving disputes. I hope that goes some way to dealing with that point.
The noble Lord, Lord Razzall, my noble friend Lord Watson and others talked about a fair employment commission to enforce tribunal awards. There are new powers in the Tribunals, Courts and Enforcement Act 2007 which streamline the process by which unpaid awards are enforced. They may be enforced in the same way as any county court judgment if unpaid after 42 days. I hope noble Lords will be patient. We want to assess the effectiveness of these measures before considering any potentially more burdensome methods for enforcing awards, but we know how strongly it is felt that some enforcement is necessary.
There is obviously strong feeling, perhaps mostly from behind me, about employment tribunals and where they are going. My noble friend Lord Wedderburn talked about tribunals deciding cases without hearings: fast-track cases. I make it absolutely clear that each party will have the right to request an oral hearing in any fast-track case. The human right to a fair trial can generally be waived in any case. The clause in fact introduces more safeguards to this power than previously existed.
The noble Lord also asked whether we can guarantee that a lay member role in tribunals will be maintained. Responses to the consultation showed the great importance placed by many tribunal service users on the role of lay members. I emphasise that the Bill makes no changes to that role.
My noble friend Lady Gibson asked about the threat to the employment tribunals as a separate pillar. We are committed to the maintenance of employment tribunals as a separate pillar within the tribunal service. Employment judges will still be required to have seven years’ legal experience before appointment.
My noble friend Lord Hoyle asked whether he could be assured that there would be no change in workers’ ability to go to an employment tribunal. Yes, there is no change at all in the right to go to a tribunal. The abolition of pre-acceptance mandatory procedures will ensure that technical failures by claimants do not invalidate their claims. Of course that right will exist. One of the issues is whether it should always be exercised.
My noble friend Lord Wedderburn asked about the status of voluntary agreements between workers and managers to resolve disputes. The tribunal will be able to take into account how far a party unreasonably failed to follow the provisions of the ACAS code. The code will be principles-based, and so it is likely that agreed arrangements, if followed, will be compliant.
My noble friend Lord Watson asked how non-unionised workers can access the tribunal. We intend to invest significant resources in better advice services from ACAS to ensure that all employees and employers have access to the best advice on how to sort out the disputes.
My noble friend Lady Turner asked about arrangements for bringing class actions. I have noted what she has said, and will pass her comments to the Minister responsible so that she gets a proper reply to that. The noble Baroness, Lady Miller of Hendon, talked about Clause 2 requiring a tribunal to find a dismissal unfair for the slightest error in procedure. The consultation certainly showed that most people believe that the clause that we have drafted reverts to a well understood position, where the tribunal must consider whether the employer acted reasonably in issues of procedure. This was supported by many consultees as a fair balance, but I am sure that we will come to this in Committee.
Moving quickly on, there was widespread support in the House for the measures we are going to take on the national minimum wage issues. There was a slight reluctance by the noble Baroness, Lady Wilcox, but we can forgive that bearing in mind her party’s record in this issue. Still, I know that it is now the policy of the party opposite to support the national minimum wage and, for that, everyone will be delighted. Since April 1999, enforcement teams have identified more than £27 million in wage arrears. In 2006-07, arrears of £3 million were identified as being underpaid to 14,000 workers. Do not just look at the figures; they are high enough as it is, but we are talking about underpayments to the worst-paid in our country. That, of course, is the point of the national minimum wage in the first place.
Non-compliance was raised by the Low Pay Commission in two annual reports: 2005 and 2007. Almost 10 years after the introduction, we consider—and I believe that this has general support—that it is right to strengthen the national minimum wage enforcement regime to encourage compliance by creating sanctions for employers who do not comply. We want to send a clear message that non-compliance is not an option. This is not just for the low paid. It is very much for the vast majority of British employers who pay the national minimum wage as the law requires.
I know that we will come back to the national minimum wage in Committee, but I will move on and say a little about agencies. There are real issues around employment agencies, and we understand the strength of feeling on all sides of the House about how some employment agencies behave. It must be said that the vast majority of employment agencies behave well. My noble friend Lord Morris, who went on to criticise the status of some of the workers there, made the point that many agency employees were well looked after. It is important to remember that. The noble Lord, Lord James, had some particular issues about this which were important. He will forgive me if I do not deal with them today; I will write to him with the answers to his queries.
The general point about employment agencies is that we continue to support the underlying principles of the draft agency workers directive, but we want a directive that offers appropriate protections and does not damage economic flexibility or close off a valued route into employment for many people. I do not claim that getting the balance right is easy, but it is something that any Government must do.
Finally, because I want to finish in two or three minutes, I move on to Clause 17, which in some ways probably dominated—
My Lords, I shall try to answer the noble Lord’s question. This was a decision made by the European Court of Human Rights. Over a number of years, government policy on human rights issues has been that it is right for us to follow what the court says. Most people, whether or not they are critical of what we are trying to do, would agree with that, which is a starting point. But significant issues have been raised by the noble Lords, Lord Lester and Lord Campbell, and others.
Let me make the following points briefly. Clause 17 increases the freedom of trade unions to set and apply their own membership rules. Of course, where individuals believe that a union has applied its membership rules wrongly or arbitrarily, such individuals can take legal action against a trade union for a breach of rules. There may be issues around a complaint made to the certification officer about such alleged breaches of rules. Noble Lords are concerned that, despite the court’s judgment, Clause 17 provides too much freedom to trade unions, and I want to make two points about that.
First, the origins of the provisions which Clause 17 seeks to repeal were found in the 1992 Act, which came into force in 1993. We are not talking about a fundamental or a long-standing feature of our trade union law. There is no evidence either before or after 1993 that trade unions have sought to expel or to exclude individuals for belonging to mainstream political parties. The example raised by the noble Lord, Lord Fowler—who is not in his place and did not speak in the debate, but posed a question to my noble friend—is a case in point. When he was a Minister and a member of the NUJ, there was no such law in existence as that which we seek to repeal. If a trade union had wanted to, it could have said that because a person was a Conservative Member of Parliament or a member of the Conservative Party he should not be a member of the union. But of course trade unions did not do that. Our case is that they will not do so if this change becomes law.
My Lords, is not the position that in the bad old days it was left to the courts to deal with abuses of trade union power—for example, those old, terrible cases such as Breen v AEU and Edwards v SOGAT? In 1992, a different Government introduced legislation to give protection against arbitrary power, which went too far. Now we have to modify that. Is the real position that the 1992 Act was a reforming Act dealing with an abuse?
My Lords, I am not sure where in the situation we are talking about—membership of a political party by an individual trade union member—it was ever abused. It certainly was not abused in the 1980s. In the example given by the noble Baroness, Lady Miller of Hendon, in regard to the National Union of Mineworkers, as far as I know, there was never any question of a Conservative member of that union being expelled, and I am sure that there were some Conservative members.
My second point is probably my better one. It was made by my noble friend when he opened the proceedings many hours ago. No other membership-based organisation is subject to the sort of restrictions in respect of political party membership as those which apply to trade unions, or certainly did until the court’s judgment. We therefore propose treating trade unions like other unincorporated associations. My noble friend used the example of golf clubs, but there are others. If this Bill is carried, trade unions will be treated—
My Lords, it is not a question of golf clubs. The question is the relationship between the Labour Party, the trade unions, political activity and so forth, which is a totally different situation. Perhaps the Minister’s noble friend does not understand yet that it is not just a sort of CBI problem. This is a problem of funds for the Labour Party.
My Lords, I do not think that Clause 17 has anything to do with whatever relationship there may have been between the Labour Party and the trade unions. That is not the issue. If a golf club is not the best example for the noble Lord, perhaps the Confederation of British Industry, the National Trust or the RSPB, which has millions of members as I understand it, are better examples. We are seeking—I know that we will rightly discuss this major point at length in Committee—to put trade unions in the same position as those other organisations, which is all that I shall say on this.
I have a winding-up section of my speech, but noble Lords will be delighted to hear that I do not intend to read it all.
My Lords, if the noble Lord is not going to give us the joys of the final part of his speech, perhaps he would at least answer my principal question on whether his noble friend will deign to attend the Committee stage of this Bill. I asked for a categorical assurance on that.
My Lords, before the Minister answers, I wish to make entirely clear from these Benches that—although we are somewhat bored by, but also amused by, the application of the Stockholm syndrome which the Tory party seem to wish to apply to the noble Lord, Lord Jones of Birmingham—it is a matter of complete indifference to us whether the noble Lord, Lord Bach, or the noble Lord, Lord Jones, appears in Committee. We do not care whether it is the organ grinder or the monkey and we allow noble Lords to decide which is which.
My Lords, for a moment I thought that the noble Lord, Lord Razzall, was complimenting me, but I am now not so sure. I think that my noble friend answered the noble Lord very adequately when he was asked questions after his opening speech. I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Grand Committee.